Growing trend of rent-to-rent in property market

There are increasing concerns over the new development in the residential lettings market known as Rent-to-Rent, which entails individuals renting a residential property and then sub-letting it for profit as a business, warns LetRisks, a provider of landlord insurance and tenant referencing. It is believed that many ‘rent-to-renters’ are operating without the landlord’s knowledge or consent. Some tenants have purportedly taken on a tenancy agreement of multiple properties, then sublet the properties to unsuspecting third parties, who are unaware of the true situation. It is not usually in the landlord’s interests to agree to a ‘rent-to-rent’ scheme because there may be difficulties in obtaining possession as there is no contractual relationship between the landlord and the actual occupier. LetRisks reports that as tenants find it difficult to find rental accommodation the problem of subletting property without consent, has increased within both the private rental market and the social housing sector. But most tenancy agreements will contain a clause preventing sub-letting. Alexandra Sollohub of PainSmith solicitors comments: “There is nothing unlawful about taking a tenancy and subletting. Indeed, many commercial tenants are landlords to a sub-tenant. But Rent-to-Rent businesses are growing and exploiting both tenants and landlords.” Michael Portman, managing director of LetRisks, adds: “We urge Landlords to be aware of this and to seek advice if they discover that their property is being sublet without permission, as all sorts of problems can arise. For example the landlord has no control over the occupiers or their actions, but may be pursued if noise or nuisance arises. Many organisations sub-letting include the right to carry out repairs and maintenance and then deduct the cost from the rent, again a situation over which the landlord has no control. And if the sub-letter ‘goes bust’, the landlord has no contract with the occupier and may experience difficulty re-possessing.”
Article courtesy of Property Investor Today
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